Monday, April 18, 2016

Putin-esque

He’s outfoxed American policy vectors in Syria, reinforcing the brutal and corrupt Bashir Assad regime, keeping that dictator in the driver’s seat in Damascus. He’s stood up to the West and its challenges to his annexation of Crimea and his suborning insurrection (with a little outside help from…) in eastern Ukraine. He’s countered Western sanctions with a cry for local production to fill the void. He’s cozied up to Iran and sent jets to harass an American naval destroyer in international waters and a US Navy jet in international airspace. Local oligarchs who defy his direction have faced loss of their wealth, prison and in some cases, death, with no consequences to Vladimir Putin.

Popularity polls in his native Russia still hold him in high regard. Is this a Russian Czar who can do no wrong in the eyes of the vast majority of his people? Are there any flaws in his seemingly impermeable armor or is this the Russia we are likely to face for a decade or more going forward?

Russians are well-aware of the skimming and glomming of major assets and cash by government officials and those in their privileged quarter. After all, most of these mega-wealthy elite did not pay fair market value for ownership of companies, land and natural resources when the Soviet Union collapsed, and yet, somehow, they wound up owning what used to belong to the government anyway. Connections and access defined the new Russia, feigning free market capitalism when raw corruption just passed the power of the old Soviet elite to the new Russian elite (many of whom are the same people or their children).

Maybe most Russians just shrugged their shoulders, asking “so, what’s new about this,” when the Panama Papers suggested that many of those in Putin’s inner circle availed themselves of the tax-evasion-and-illicit-gain illusive “Russian doll” corporate structures and secret accounts through the Panamanian law firm Mossack Fonseca. But perhaps there are more ordinary Russians taking another look at their leadership than Mr. Putin has faced before. After all, for most Russians, the economy has tanked and daily life is increasingly miserable.

With oil and gas prices still very low, the cash that Russia had counted on to finance a new solid economy vaporized. Oil riches have devolved into a nation that has uncharacteristically run a major deficit since 2012, with its sizeable reserves expected to run out in 2017. The ruble itself has crashed and burned as Russians thus faced higher prices for just about everything, from basic commodities to simple utility bills. With the pressure of sanctions compounding, many Russian companies are unable to generate their expected top-line revenues, resulting in too many workers missing paychecks. To rub salt in already raw wounds, the government has been forced to close basic institutions like public schools and hospitals. Infrastructure is crumbling fast as well.

The little cracks in Putin’s armor were beginning to be visible at Mr. Putin’s annual televised response to selected queries from the Russia people, which took place this year on April 14th. “A somewhat humbled, or at least not swaggering, PresidentVladimir V. Putinheld his annual, live call-in show on [April 14th], with his answers to the choreographed calls intended to underscore his concern for the plight of ordinary Russians amid a second, punishing year of recession.

“Largely gone were the diatribes against opponents like the United States and Turkey. In their place was praise for domestic cheesemongers and Russian fishermen, and approval of government efforts to keep prices down for everything.

“Perhaps the entire marathon, three hours and 40 minutes, the 14th‘Direct Line’session, could best be summed up by Mr. Putin’s answer to a first grader named Alina. She asked the president whether he thought a woman could become president ofRussia. Her dad had told her that only a man like Mr. Putin could handle America, she said.

“‘We should not be thinking about how to cope with America, we should think about how to cope with our internal problems, our internal issues,’ Mr. Putin answered. ‘Roads, problems with the public health service, the education system, the development of our economy, economic recovery, problems of setting the pace of growth.’… If Russia addressed those problems, Mr. Putin said, the country would feel ‘invulnerable.’

“But Russians were clearly feeling vulnerable, as questions poured in … In all, around three million questions were submitted by telephone and Internet, television executives said, of which Mr. Putin answered about 60… The first questions were posed by two studio anchors who pulled them from social media platforms, one about the steep rise in prices and the second asking when the economy would hit bottom.

“‘The government’s economic officials keep telling us that we have hit the bottom in the crisis and are now on the way up again,’ noted the caller. ‘They’ve already said this seven times. Where is the Russian economy now as you see it?’

“Mr. Putin, who had previously predicted that economic growth would rebound by now, was more cautious this time, calling it a “gray period.” The president admitted that the economy had shrunk by 3.7 percent last year, but said he expected it would only contract by 0.3 percent in 2016 and register modest growth after that.

“He also said there was enough money in the two main sovereign wealth fundsand other reserves to tide Russia over for the next four years. [Not exactly say most knowledgeable analysts who embrace the 2017 number noted above].” New York Times, April 14th. Is a statement that our economy is contracting less reassuring? And so we will wait and see if those cracks become giant fissures, and if they do, exactly how far Mr. Putin might be willing to go to life those crushing sanctions. Don’t expect anything significant to happen anytime soon, but these signs are very important.

I’m Peter Dekom, and the teas leaves can suggest a major global policy shift if read correctly.

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Peter's Bio

Peter J. Dekom practices law in Los Angeles and was formerly "of counsel" with Weissmann Wolff Bergman Coleman Grodin & Evall and a partner in the firm of Bloom, Dekom, Hergott and Cook. Mr. Dekom's clients include or have included such Hollywood notables as George Lucas, Paul Haggis, Keenen Ivory Wayans, John Travolta, Ron Howard, Rob Reiner, Andy Davis, Robert Towne and Larry Gordon among many others, as well as corporate clients such as Sears, Roebuck and Co., Pacific Telesis and Japan Victor Corporation (JVC). He has been listed in Forbes among the top 100 lawyers in the United States and in Premiere Magazine as one of the 50 most powerful people in Hollywood .

Mr. Dekom has been a management/marketing consultant, and entrepreneur in the fields of entertainment, Internet, and telecommunications. As a consultant to the state of New Mexico for almost a decade, he was instrumental in creating, writing and implementing legislation to encourage film and television production in the state and supervised the film loan program portion of that incentive structure until the spring of 2011. Mr. Dekom has also provided off-balance sheet, insurance-backed financing for major motion picture studios.

Mr. Dekom served on the board of directors of Imagine Films Entertainment while the company remained publicly traded and was a board member of Will Vinton Studios and Cinebase Software, among others, leaving upon change of ownership. He has also served as a member of the Academy of Television Arts and Sciences and Academy Foundation, Board of Directors, Chairman (now Emeritus) of the American Cinematheque, and on the Advisory Board of the Shanghai International Film Festival. He recently served on the Board of Governors for the America Bar Assn.’s Sports and Entertainment Law Section, where he often authored articles, delivered lectures and continues to be an active participant.

The Beverly Hills Bar Association honored Mr. Dekom as Entertainment Lawyer of the Year in 1994, the Century City Bar Association accorded him the same honor in 2004, and the Family Assistance Program named him Man of the Year in 1992 for his work with the homeless. In 2012, the American Bar Association, through its Forum on Sports and Entertainment Law, honored Mr. Dekom with its highest recognition for entertainment lawyers, the Ed Rubin Service Award. Author of dozens of scholarly articles, Mr. Dekom also is the co-author of Not on My Watch; Hollywood vs. the Future (New Millennium Publishing, 2003) with Peter Sealey and author of Next: Reinventing Media, Marketing and Entertainment (HekaRose Publishing Group 2014). He has served as an adjunct professor in the UCLA Film School, a lecturer (entertainment marketing) at the University of California, Berkeley Haas School of Business as well as being a featured speaker at film festivals, corporations, universities and bar associations all over the world.

Mr. Dekom graduated from Yale in 1968 (BA), and graduated first in his class in 1973 from the UCLA School of Law (JD). He is married to Kelley Choate, an MBA and former art gallery-owner who evolved into a renowned micro-collage artist in her own right. He also has a son, Christopher (b. 1983), who is a Duke University graduate, a Chartered Financial Analyst, a 2013 Darden (UVa) MBA graduate, and is currently an executive with a Los Angeles-based media and entertainment company. Chris' wife, Stephanie (a 2013 George Washington University MD grad), is a neonatal pediatrics 'fellow' at a major Los Angeles hospital